New York Forward Loan Fund (NYFLF) Empire State Development A Division of Empire State Development 6/4/2020
New York Forward Loan Fund (NYFLF) New York Forward Loan Fund (NYFLF) is a new economic recovery loan program aimed at supporting New York State small businesses, nonprofits and small landlords as they reopen after the COVID-19 outbreak and NYS on PAUSE. It targets the state’s small businesses with 20 or fewer employees (90% of all businesses), nonprofits, and small landlords that have seen loss of rental income. The working capital loans of up to $100,000 are timed to support businesses and organizations as they proceed to reopen and have upfront expenses to comply with guidelines (e.g., inventory, marketing, refitting for new social distancing guidelines) under the New York Forward Plan. These loans are available to small businesses, nonprofits, and small landlords that did not receive a loan from either the U.S. Small Business Administration (SBA) Paycheck Protection Program (PPP) or SBA Economic Injury Disaster Loans (EIDL). The loans are not forgivable in part or whole. The loans will need to be paid back over 5-year term with interest. 2
New York Forward Loan Fund - Overview Applications for the New York Forward Loan Fund will be open based on the industries and regions that have been reopened. This is not a first-come, first-served loan program. Applications will be reviewed on a rolling basis as regions and industries are phased to reopen. For small businesses and nonprofits that are in industries and regions that are not yet reopen, you are encouraged to prepare your pre-application in advance by taking advantage of the application preparation resources available at the ESD Resources Contact Page. This will allow you to quickly submit your application once it is announced that your industry and region is phased to reopen. 65% of the loan fund is reserved for small businesses; 30% for small landlords; and 5% for nonprofit organizations. Pre-applications are now open at www.nyloanfund.com and will be on a rolling basis thereafter as regions and industries reopen. Up to date information on regional opening status can be found at https://forward.ny.gov/ 3
New York Forward Loan Fund – Geographic Proportionality The geographic proportionality goals for the New York Loan Fund are: Capital Region 4% Mohawk Valley Region 4% Central NY Region New York City 4% Region 30% Finger Lakes North Country Region 4% Region 4% Mid-Hudson Southern Tier Region 12% Region 4% Long Island Western NY Region 18% Region 8% • In addition at least 60% of the loans will be made to Minority and/or Women owned businesses. 4
How do I apply? PRE-APPLICATIONS are now OPEN ONLINE at: www.nyloanfund.com Five (5) Community Development Financial Institution (CDFI) lenders are accepting applications. The application portal will help you choose the best lender for your industry and area. Please do not apply to a lender directly! Small Businesses: Accion East, National Development Council Impact Loan Fund, Pursuit and TruFund Financial Services Nonprofits: National Development Council Impact Loan Fund and TruFund Financial Services. Small Landlords: Community Preservation Corporation 5
SMALL BUSINESSES New York Forward Loan Fund 6
The New York Forward Loan Fund – Loan Terms (Small Business) Working Capital loans can be up to $100,000 on a five-year term. SMALL BUSINESSES Loan Amounts: • For small businesses: Lesser of (a) $100,000 or (b) up to 100% of average monthly revenues for a 3-month period prior to the COVID-19 outbreak. • The 3-month period can be any 3-month period from 2019 or January to March 2020. Interest Rates: • For small businesses, the fixed annual interest rate on the loan will be 3%. Repayment: Term: 5 years (60 months). • For months 1 - 12: Interest only payments, paid monthly. • For months 13 - 60: Interest and principal payments, paid monthly. 7
The New York Forward Loan Fund – Loan Terms (continued) Use of Proceeds : • Proceeds are required to be used for working capital, inventory, marketing, refitting for new social distancing guidelines, operating and emergency maintenance, property taxes, utilities, rent, supplies, etc. • Refinancing of an existing loan is not permitted. • The loan applicant will be required to detail anticipated use of funds when they apply. Borrower Fees : • No application fees. Late fee will be assessed for missed payments. Recourse : • No collateral is required. Prepayment : • Borrower may prepay the loan without penalty. 8
The New York Forward Loan Fund – Small Business Eligibility To be eligible for a New York Forward Loan Fund loan, a small business must meet the following requirements: • Employ 20 or fewer full time equivalent (FTE) employees; • Have gross revenues of less than $3 million per year; • Have not received an SBA Paycheck Protection Program (PPP) or an Economic Injury Disaster Loan (EIDL) in 2020; • Have suffered a direct economic hardship as a result of COVID-19 related social distancing policies and stay-at-home order that have materially impacted their operations; • Been in business for at least one year as of the date of loan application; and • Be headquartered in and do business in the State of New York. Note: the pre-application should be completed and submitted by the owner of the business with the largest ownership interest, and that all owners with more than 20% ownership will be required to attest to the information therein. 9
The New York Forward Loan Fund – Ineligible Businesses Businesses that are NOT eligible include, but may not be limited to: • Corporate-owned franchises; • Not-for-profit social clubs; • Branch banks; • Payday loan stores; • Pawn shops; • Astrology, palm reading; • Liquor stores, night clubs; • Adult bookstores, massage parlors, strip clubs; • Track wagering facilities; • Trailer-storage yards; and • Marijuana dispensaries. 10
The New York Forward Loan Fund – Small Business Documentation A small business loan applicant must provide the following documentation: • Most recently filed tax returns, if available and required by the lender; if not available, internally generated income statements or other documentation used to determine cash flows; • Schedule of ownership (name, address, Social Security number, phone number, e-mail, percentage ownership, photo ID for any owners with more than 20% ownership); • Executed Attestation Form (will be provided by lender); • Brief description of COVID-19 impacts on jobs and revenues; • Evidence of legal formation of business entity (Articles of Incorporations and/or Bylaws); and • Personal Credit Report (if applicable). Your lender will reach out to the loan applicant to collect the required documentation, conduct any credit checks, and finalize the application review process with you. 11
SMALL LANDLORDS New York Forward Loan Fund 12
The New York Forward Loan Fund – Loan Terms (Small Landlords) Working Capital loans can be up to $100,000 on a five-year term. SMALL LANDLORDS Loan Amounts: • For small landlords, lesser of (a) $100,000 or (b) projected reduction in 3-months net operating income based on actual lost income for the month of April 2020 or May 2020. Interest Rates: • For small landlords, the fixed annual interest rate on the loan will be 3%. Repayment: Term: 5 years (60 months). • For months 1 - 12: Interest only payments, paid monthly. • For months 13 - 60: Interest and principal payments, paid monthly. 13
The New York Forward Loan Fund – Loan Terms (continued) Use of Proceeds : • Proceeds are required to be used for working capital, inventory, marketing, refitting for new social distancing guidelines, operating and emergency maintenance, property taxes, utilities, rent, supplies, etc. • Refinancing of an existing loan is not permitted. • The loan applicant will be required to detail anticipated use of funds when they apply. Borrower Fees : • No application fees. Late fee will be assessed for missed payments. Recourse : • No collateral is required. Prepayment : • Borrower may prepay the loan without penalty. 14
The New York Forward Loan Fund – Small Landlord Eligibility To be eligible for a New York Forward Loan Fund loan, a small landlord must meet the following requirements: • Have no more than 200 units under ownership, and no single property greater than 50 units; • Properties must either be located in a low or moderate income (LMI) census tract or meet a rent test where property rents are affordable to tenants of low and moderate income; • Properties must have positive cash flow for a 12-month period prior to New York Forward loan request; • Properties must have an active forbearance agreement for their mortgage or proof that they have not missed a monthly debt service payment in the last 12 months, and/or no active mortgage; • Properties must be current on their property taxes through March 2020; • Property owners must attest that they will not evict COVID-impacted non-paying tenants; and • Properties must be in good repair, with no life and safety violations. 15
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